9ja voice:

islamic banks cannot stand a year in nigeria without going babkrupt. unless its been finance tru national purse.
why can't ibb and atiku join hand and do it or even dangote and dantata. they know they won't survive that's why they keep off and here is[b] sls want us to feed almajaris from the national purse.[/b]

Although I have my reservation on some of the methods of Sanusi but it is fair we admit here that Islamic Banking is not his brainchild. Soludo sure had a comprehensive blueprint which included Islamic Banking.

However, my bet is that Nigerians (especially non-Muslims) would find it hard to embrace Islamic Banking without suspicion or even rancour as reported by the person who started this thread. And this is one of the things that is wrong with Nigeria.

O ye religionists, when shall ye deploy religion as an instrument of unity and not division; and of cooperation instead of competition? 

Pukkah:

Of course yes. This is because all things being equal, an open-minded non-Muslim businessman is not likely to mind where he's getting project funding from.

Honestly, how do you think muslims would react if someone name Rev. Lamido Sanusi was the CBN Governor and was implementing something called 'Christiandum' banking?

CBN should educate Nigerians on what Islamic banking is and what it is not.

Guys, what do you expect from a CBN governor whose only graduate degree is in Islamic studies from a Sudanese university. I'm sure that in absence of any formal training in complex economic and financial theories, islamic banking and its enforcement by our CBN will be Sanusi's next move.

Yes, Islamic banking has been on the books since the time of Soludo, but everyone know the implementation under Sanusi is bound to be radically different.

Chyz*:

Honestly, how do you think muslims would react if someone name Rev. Lamido Sanusi was the CBN Governor and was implementing something called 'Christiandum' banking?

Chyz, they would also likely rave and threaten fire and brimstone.  The reaction would probably not be less than what we are witnessing.  This is why I said earlier that the Nigerian space as it is does not lend itself to certain things which ordinarily should not even make the headlines.  The Nigerian space is filled with suspicion, intolerance, and competition between the adherents of the two major religions. How much progress can we record in an environment like that?  And this is why certain folks have been calling for a restructuring of the polity.  

Permit me to turn your question around: how do you think Christians would react if Pastor Sanusi was the one implementing Islamic Banking?

Religion is like an opiom to the ppl

Chyz*:

Honestly, how do you think muslims would react if someone name Rev. Lamido Sanusi was the CBN Governor and was implementing something called 'Christiandum' banking?

Christiandom Banking? You want them to start killing infidel NYSC members and burning of churches in the north for going to put their money there? Haba, it rather be Sango or Amadioha banking!

but we already have Islamic investment Banking in Nigeria, Lotus captital and guess who the chairman is? Fola Adeola, Yes,, founder of GTB.

http://www.lotuscapitallimited.com/index.php/board-of-directors

Creating wealth the Halal Way, me don't see anything wrong with it as long they don't help in laundering money the middle east.

Thats what they will tell us to gain grounds,trust nigerian system tommorow it will be a determining factor to do bussiness or to gain employment with certain organizations anti-christ in disguise,it wont work

bunch of bigots

if you do not like islamic bank then don't use it, na by force

let people who want to use it, use the bank

i have seen some stu.pid comments on this thread alone, stu.pid bigots

This Muslim people again.Always causing confusion as if they damage they have caused is not enough?Can a Micheal also secured a job with the Islamic Bank?Please,Sanusi,you have done well so far, pls,dont be carry away by the accolade,

bunch of bigots

if you do not like islamic bank then don't use it, na by force

let people who want to use it, use the bank

i have seen some stu.pid comments on this thread alone, stu.pid bigots

Hey! Mind your use of words or be banned !

I live in the Middle East & there's absolutely nothing wrong with islamic banking.

However I agree with the Anglican Bishops on not allowing it in Nigeria for 2 main reasons :

1. Though they claim they do not charge 'interest' they actually do & call it 'profit rate' instead.
(They have a number of other products however  e.g Murdaraba etc which is basically co-financing,which is available in conventional banking as well)

2. Nigerians as pointed out do not fully understand their religion (both muslims & christians) and there is the natural inclination to take religion as one would support Man U & Arsenal  (i.e us againts them).

So any reasonable system that works elsewhwerre will naturally fail in Nigeria e.g

Sharia is practised all over the world,but its only in Nigeria & Saudi Arabia (aside from the lawless taliban areas) that a govt cuts of the limbs of its citizens for stealing cows etc.

Its also in Nigeria that churches will be burnt because somebody in Denmark purpotedly insulted another person's prophet.

So I agree No Islamic ,Christian banking in Nigeria.

Thank you.

alj_harem:

bunch of bigots

if you do not like islamic bank then don't use it, na by force

let people who want to use it, use the bank

i have seen some stu.pid comments on this thread alone, stu.pid bigots

It's like saying those who don't want to be governed with sharia law simply opt out. We all know that it's not as easy as that, especially now that the CBN governor has started to champion it.

Pukkah:

Chyz, they would also likely rave and threaten fire and brimstone.  The reaction would probably not be less than what we are witnessing.  This is why I said earlier that the Nigerian space as it is does not lend itself to certain things which ordinarily should not even make the headlines.  The Nigerian space is filled with suspicion, intolerance, and competition between the adherents of the two major religions. How much progress can we record in an environment like that?  And this is why certain folks have been calling for a restructuring of the polity.  

Permit me to turn your question around: how do you think Christians would react if Pastor Sanusi was the one implementing Islamic Banking?

Muslims would react totally different in such a case than christians if the shoe was on the other foot. Muslim would make sure blood is spilled. As for your last question, the same reaction that the christians are giving to Mallam Sanusi is the same reaction,even worse, that they'd give to Pastor Sanusi.

Why block it? Nigerian is almost evenly split between Muslims and Christians. Introducing Islamic Banking will allow achieve plenty in the efforts to integrate the North.

Simply, any scheme that encourages the North to take part is a good thing.

For all the people saying this thing against having the bank,you can go hug transformer.We have a right to choose between banking islamically or westernised! Na by force that we must be without.Same right you have to deny it,we share same right to Have it so long as it is not criminal or violate any laws.
Remember like some people said here Soludu initiated this and i know it also has being discussed at the national assembly.This issues were looked at and after understanding the operations alot of them accepted it.What is disturbing some people are mere bigots period!!!!Pukkah you've told them alot!Its not that they don't understand.Its about the Islamic name period!They prefer its called Jesus bank!!!
You have your usual bank,go there na by force!If we want an islamic way of banking then lets have it!You have your breweries don't you?So stop disturbing people abeg!
Do you know that during Soludu the bank would have taken if not for the FDI! which the Arab investors were skeptical about.Especially with the financial records of Nigerians.I also know Dantata has a lot of stake in it from the Local investors.Last i checked the had met the 25Bil required from local and foreign investors.
Lastly if you don't like it,We love it and would promote it.Especially in our areas.You can not deny us that!

Islamic banking (or participant banking) is banking or banking activity that is consistent with the principles of Islamic law (Sharia) and its practical application through the development of Islamic economics. Sharia prohibits the payment or acceptance of specific interest or fees (known as Riba or usury) for loans of money. Investing in businesses that provide goods or services considered contrary to Islamic principles is also Haraam (forbidden). While these principles were used as the basis for a flourishing economy in earlier times, it is only in the late 20th century that a number of Islamic banks were formed to apply these principles to private or semi-private commercial institutions within the Muslim community

[b]Introduction[/b]


During the Islamic Golden Age, early forms of proto-capitalism and free markets were present in the Caliphate,[3] where an early market economy and an early form of mercantilism were developed between the 8th-12th centuries, which some refer to as "Islamic capitalism".[4] The monetary economy of the period was based on the widely circulated currency the dinar, and it tied together regions that were previously economically independent.

A number of economic concepts and techniques were applied in early Islamic banking, including bills of exchange, partnership (mufawada) such as limited partnerships (mudaraba), and forms of capital (al-mal), capital accumulation (nama al-mal),[5] cheques, promissory notes,[6] trusts (see Waqf),[7] transactional accounts, loaning, ledgers and assignments.[8] Organizational enterprises independent from the state also existed in the medieval Islamic world, while the agency institution was also introduced during that time.[9][10] Many of these early capitalist concepts were adopted and further advanced in medieval Europe from the 13th century onwards.

Riba

The word "Riba" means excess, increase or addition, which according to Shariah terminology, implies any excess compensation without due consideration (consideration does not include time value of money). The definition of riba in classical Islamic jurisprudence was "surplus value without counterpart", or "to ensure equivalency in real value", and that "numerical value was immaterial."

Applying interest was acceptable under some circumstances. Currencies that were based on guarantees by a government to honor the stated value (i.e. fiat currency) or based on other materials such as paper or base metals were allowed to have interest applied to them.[11] When base metal currencies were first introduced in the Islamic world, the question of "paying a debt in a higher number of units of this fiat money being riba" was not relevant as the jurists only needed to be concerned with the real value of money (determined by weight only) rather than the numerical value. For example, it was acceptable for a loan of 1000 gold dinars to be paid back as 1050 dinars of equal aggregate weight (i.e., the value in terms of weight had to be same because all makes of coins did not carry exactly similar weight).
[edit] Modern Islamic banking

Interest-free banking seems to be of very recent origin. The earliest references to the reorganisation of banking on the basis of profit sharing rather than interest are found in Anwar Qureshi (1946), Naiem Siddiqi (1948) and Mahmud Ahmad (1952) in the late forties, followed by a more elaborate exposition by Mawdudi in 1950.[citation needed] The writings of Muhammad Hamidullah 1944, 1955, 1957 and 1962 should be included in this category.[citation needed] They have all recognised the need for commercial banks and their perceived "necessary evil," have proposed a banking system based on the concept of Mudarabha - profit and loss sharing.[citation needed]

In the next two decades interest-free banking attracted more attention, partly because of the political interest it created in Pakistan and partly because of the emergence of young Muslim economists. Works specifically devoted to this subject began to appear in this period. The first such work is that of Muhammad Uzair (1955).[citation needed] Another set of works emerged in the late sixties and early seventies. Abdullah al-Araby (1967), Nejatullah Siddiqi (1961, 1969), al-Najjar (1971) and Baqir al-Sadr (1961, 1974) were the main contributors.[citation needed]

The early 1970s saw institutional involvement. The Conference of the Finance Ministers of the Islamic Countries held in Karachi in 1970, the Egyptian study in 1972, the First International Conference on Islamic Economics in Mecca in 1976, and the International Economic Conference in London in 1977 were the result of such involvement. The involvement of institutions and governments led to the application of theory to practice and resulted in the establishment of the first interest-free banks. The Islamic Development Bank, an inter-governmental bank established in 1975, was born of this process.[12]

The first modern experiment with Islamic banking was undertaken in Egypt under cover without projecting an Islamic image—for fear of being seen as a manifestation of Islamic fundamentalism that was anathema to the political regime.[citation needed] The pioneering effort, led by Ahmad Elnaggar, took the form of a savings bank based on profit-sharing in the Egyptian town of Mit Ghamr in 1963. This experiment lasted until 1967 (Ready 1981), by which time there were nine such banks in country.[13]
Wiki letter w cropped.svg This section requires expansion.

In 1972, the Mit Ghamr Savings project became part of Nasr Social Bank which, currently, is still in business in Egypt. In 1975, the Islamic Development Bank was set up with the mission to provide funding to projects in the member countries.[14] The first modern commercial Islamic bank, Dubai Islamic Bank, opened its doors in 1975. In the early years, the products offered were basic and strongly founded on conventional banking products, but in the last few years the industry is starting to see strong development in new products and services.

Islamic Banking is growing at a rate of 10-15% per year and with signs of consistent future growth.[15] Islamic banks have more than 300 institutions spread over 51 countries, including the United States through companies such as the Michigan-based University Bank, as well as an additional 250 mutual funds that comply with Islamic principles. It is estimated that over US$822 billion worldwide sharia-compliant assets are managed according to The Economist.[16] This represents approximately 0.5% of total world estimated assets as of 2005.[17] According to CIMB Group Holdings, Islamic finance is the fastest-growing segment of the global financial system and sales of Islamic bonds may rise by 24 percent to $25 billion in 2010.[18]

The Vatican has put forward the idea that "the principles of Islamic finance may represent a possible cure for ailing markets.

Largest Islamic banks

Shariah-compliant assets reached about $400 billion throughout the world in 2009, according to Standard & Poor’s Ratings Services, and the potential market is $4 trillion.[20][21] Iran, Saudi Arabia and Malaysia have the biggest sharia-compliant assets.[22]

In 2009 Iranian banks accounted for about 40 percent of total assets of the world's top 100 Islamic banks. Bank Melli Iran, with assets of $45.5 billion came first, followed by Saudi Arabia's Al Rajhi Bank, Bank Mellat with $39.7 billion and Bank Saderat Iran with $39.3 billion.[23][24] Iran holds the world's largest level of Islamic finance assets valued at $235.3bn which is more than double the next country in the ranking with $92bn. Six out of ten top Islamic banks in the world are Iranian.[25][26][27] In November 2010, The Banker published its latest authoritative list of the Top 500 Islamic Finance Institutions with Iran topping the list. Seven out of ten top Islamic banks in the world are Iranian according to the list.[28]
[edit] Principles

Islamic banking has the same purpose as conventional banking except that it operates in accordance with the rules of Shariah, known as Fiqh al-Muamalat (Islamic rules on transactions). The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of riba (usury). Common terms used in Islamic banking include profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijar).

In an Islamic mortgage transaction, instead of loaning the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments. However, the bank's profit cannot be made explicit and therefore there are no additional penalties for late payment. In order to protect itself against default, the bank asks for strict collateral. The goods or land is registered to the name of the buyer from the start of the transaction. This arrangement is called Murabahah. Another approach is EIjara wa EIqtina, which is similar to real estate leasing. Islamic banks handle loans for vehicles in a similar way (selling the vehicle at a higher-than-market price to the debtor and then retaining ownership of the vehicle until the loan is paid).

An innovative approach applied by some banks for home loans, called Musharaka al-Mutanaqisa, allows for a floating rate in the form of rental. The bank and borrower form a partnership entity, both providing capital at an agreed percentage to purchase the property. The partnership entity then rents out the property to the borrower and charges rent. The bank and the borrower will then share the proceeds from this rent based on the current equity share of the partnership. At the same time, the borrower in the partnership entity also buys the bank's share of the property at agreed installments until the full equity is transferred to the borrower and the partnership is ended. If default occurs, both the bank and the borrower receive a proportion of the proceeds from the sale of the property based on each party's current equity. This method allows for floating rates according to the current market rate such as the BLR (base lending rate), especially in a dual-banking system like in Malaysia.

There are several other approaches used in business transactions. Islamic banks lend their money to companies by issuing floating rate interest loans. The floating rate of interest is pegged to the company's individual rate of return. Thus the bank's profit on the loan is equal to a certain percentage of the company's profits. Once the principal amount of the loan is repaid, the profit-sharing arrangement is concluded. This practice is called Musharaka. Further, Mudaraba is venture capital funding of an entrepreneur who provides labor while financing is provided by the bank so that both profit and risk are shared. Such participatory arrangements between capital and labor reflect the Islamic view that the borrower must not bear all the risk/cost of a failure, resulting in a balanced distribution of income and not allowing the lender to monopolize the economy.

Islamic banking is restricted to Islamically acceptable transactions, which exclude those involving alcohol, pork, gambling, etc. The aim of this is to engage in only ethical investing, and moral purchasing. Islamic Banking and Finance Database provides more information on the subject.

In theory, Islamic banking is an example of full-reserve banking, with banks achieving a 100% reserve ratio.[29] However, in practice, this is not the case, and no examples of 100 per cent reserve banking are observed.[30]

Islamic banks have grown recently in the Muslim world but are a very small share of the global banking system. Micro-lending institutions founded by Muslims, notably Grameen Bank, use conventional lending practices and are popular in some Muslim nations, especially Bangladesh, but some do not consider them true Islamic banking. However, Muhammad Yunus, the founder of Grameen Bank and microfinance banking, and other supporters of microfinance, argue that the lack of collateral and lack of excessive interest in micro-lending is consistent with the Islamic prohibition of usury (riba).

Shariah Advisory Council/Consultant

Islamic banks and banking institutions that offer Islamic banking products and services (IBS banks) are required to establish a Shariah Supervisory Board (SSB) to advise them and to ensure that the operations and activities of the banking institutions comply with Shariah principles. On the other hand, there are also those who believe that no form of banking that involves interest payments can ever comply with the Shariah.[33]

In Malaysia, the National Shariah Advisory Council, which has been set up at Bank Negara Malaysia (BNM), advises BNM on the Shariah aspects of the operations of these institutions and on their products and services. (See: Islamic banking in Malaysia). In Indonesia the Ulama Council serves a similar purpose.

A number of Shariah advisory firms have now emerged to offer Shariah advisory services to the institutions offering Islamic financial services. Issue of independence, impartiality and conflicts of interest have also been recently voiced. The WDIBF World Database for Islamic Banking and Finance has been developed to provide information about all the websites related to this type of banking.[34]
[edit] Fundamentals of Islamic finance

The term “Islamic banking” refers to a system of banking or banking activity that is consistent with Islamic law (Shariah) principles and guided by Islamic economics. In particular, Islamic law prohibits usury, the collection and payment of interest, also commonly called riba in Islamic discourse. In addition, Islamic law prohibits investing in businesses that are considered unlawful, or haraam (such as businesses that sell alcohol or pork, or businesses that produce media such as gossip columns or pornography, which are contrary to Islamic values). In the late 20th century, a number of Islamic banks were created to cater to this particular banking market.
[edit] Usury in Islam

The criticism of usury in Islam was well established during the lifetime of the Prophet Muhammad and reinforced by several of verses in the Qur'an dating back to around 600 AD. The original word used for usury in this text was Riba, which literally means “excess or addition”. This was accepted to refer directly to interest on loans so that, according to Islamic economists Choudhury and Malik (1992), by the time of Caliph Umar, the prohibition of interest was a well-established working principle integrated into the Islamic economic system. This interpretation of usury has not been universally accepted or applied in the Islamic world. A school of Islamic thought which emerged in the 19th Century, led by Sir Sayyed, argues for an interpretative differentiation between usury, or consumptional lending, and interest, or lending for commercial investment (Ahmed, 1958). Nevertheless, Choudhury and Malik provide evidence for “a gradual evolution of the institutions of interest-free financial enterprises across the world” (1992: 104). They cite, for instance, the current existence of financial institutions in Iran, Pakistan and Saudi Arabia, the Dar-al-Mal-al-Islami in Geneva and Islamic trust companies in North America. This growing practice of Islamic banking will be discussed more fully in a later section as a modern application of usury prohibition.

pls someone should tell me wat is the problem with some of our northern leaders? They take advantage of Any position given to them to preach religion, Gen. Burhari, Gen. Abacha , Ahmed Sani, frmer gov. of Zamfara, preaching sharia, frmer gov .of bornu, he preachd boko haram, now is the of sanusi to preach islamic bank, he should is not possible

Most people tend not to understand the ideas of Sanusi. He actually wanted Islamic banking but this banking is yet to be defined as a open to all people not just muslims. Nigeria is very tensed, we are not yet at the point of ignoring religious differences while offering services.

I'm not a fan of indirectly teaching the Quran through the guise of "learning the system" of islamic banking. Essentially that is what Sanusi is doing. The employees especially will have to do this(read Quran or Hadith). How are going to be the heads of these banks? Is it improper,according to islam, to allow a christian to head an islamic bank? In which locations will the bank be in? Is there a possibility that unfavoravable circumstances for secular banks will be created in order to collapse them and substitute them with islamic banks? Will the community that the CBN is proposing to introduce the banks in have a say-so of whether the banks is allowed in their area? If any of you supporting islamic banking can answer these questions,do so.

All those against this banking system should cover their faces in shame. Haknai took his time to explain the basic concepts of how it works but all you see is religion. We are in real trouble in this country if people that claim to have an education only see issues through the lens of religion , race or tribe.
What I expect from true  christians that are objective is to ask if this better economically and how other banks should be compelled to bank this way if actually it is better than the current system we are running.
They can give it any name they want afterwards if they are not confortable with the word ISLAM.

What I find appalling about this discussion is that both the Bishops and many people here are making straw arguments - they make their argument look weak and bigoted by declaring a total NO to any form of Islamic Banking. Similarly, those coming here to goad on Sanusi with his hidden agenda are showing themselves to be at least religious zealots, and perhaps bigots. The issue here is simple:

1. There is no basic problem with Islamic Banking, but there are different types of Islamic Banking.

2. The type practiced in Iran, Saudi Arabia and the like is the same authoritarian Sharia Compliant version that Sanusi is proposing. What's worse is that it is not stated explicitly upfront. Until you go into the Glossary where they actually define what was meant by "Sharia Compliant" you will not realize the kind of danger this portends. Once you read that the problem becomes clear - it is pure and simple a plot at further Islamization of the Nigerian State.

3. The type of Islamic Banking that would work for Nigeria is that being practiced in Europe - which is basically NON-INTEREST BANKING without all the Sharia-Compliant and Religious Enforcement laws jargon.

4. For those thinking that Sharia is not going to tear Nigeria apart - what do you call what Boko Haram is doing. That group, small as it is now, is steadily spreading mayhem across the northern states. What's more their underlying ideology is that conventional education is an abomination. The question is: Are these idiots being forced by the government to send their sons and daugthers to conventional schools, and not Islamic schools? NO. With that answer the follow-up question is why are they killing innocent people when nobody stops them from going to Islamic schools. With Sanusi's proposal  many, having forgotten their let us have Islamic Banking statement, will wonder when a similar "Haram" group starts bombing conventional banks around the nation.

Without hesitation I say that this will certainly put the nail in this tottering "gnats" coffin for good - 2015 may as well see the breakup of Nigeria if this kind of impunity continues unabated.

Pukkah:

Although I have my reservation on some of the methods of Sanusi but it is fair we admit here that Islamic Banking is not his brainchild. Soludo sure had a comprehensive blueprint which included Islamic Banking.

However, my bet is that Nigerians (especially non-Muslims) would find it hard to embrace Islamic Banking without suspicion or even rancour as reported by the person who started this thread. And this is one of the things that is wrong with Nigeria.

O ye religionists, when shall ye deploy religion as an instrument of unity and not division; and of cooperation instead of competition?  

No Islamic banking o. What is wrong with this CBN dude sef. The number of banks we have is enough and if paradventure they want 2 add more, they should look 4 a more ideal name 2 give it instead of coming up Islamic my foot. Terorist!

You are being too clever by half.

We all know how the Nigerian education system works - there are public schools, there are private schools and the latter may decide to be an Islamic school or a Christian school.

Shouldn't that stop any kind of conflict related to education/religion interaction in Nigeria? That would be your simple view, but the question to you is: how many people have died and will yet die based on the Boko Haram Islamic Group insistence that Conventional Education is Haram? Now imagine that statement with Education replaced with Banking, after Malam Sanusi sneaks in Islamic teaching into our banking system.

Understanding minds can see the red blinking sign of DANGER.

rman:

All those against this banking system should cover their faces in shame. Haknai took his time to explain the basic concepts of how it works but all you see is religion. We are in real trouble in this country if people that claim to have an education only see issues through the lens of religion , race or tribe.
What I expect from true  christians that are objective is to ask if this better economically and how other banks should be compelled to bank this way if actually it is better than the current system we are running.
They can give it any name they want afterwards if they are not confortable with the word ISLAM.

d bishop is right.

The term “Islamic banking” refers to a system of banking or banking activity that is consistent with Islamic law (Shariah) principles and guided by Islamic economics.

In a non Islamic state? Sanusi must be crazy.Do you understand what the word secular mean? why would a non interest bank be sharia compliant in a non Sharia state? Sanusi is a fanatic